Tuesday, 28 February 2017

One of the perennial issues facing those whose relationships have ended- and by extension, their lawyers, mediators, arbitrators and family law judges, is what weight should be given to initial contributions as against contributions over the length of a marriage, especially a long marriage? Typically the party with most of the money, usually the husband, will say that initial contributions should attract a lot more weight (and therefore the other party, usually the wife) will get considerably less, while the party who came into the relationship with a lot less (usually the wife) will say- we have been together a long time, and if you don't count my contributions as equal, I am being ripped off.

Into this mix is the ongoing fight between family lawyers- when the lawyer for the party with money follows their client's line, and the one without takes the opposite view. All too often these matters do not resolve by negotiation, or through mediation, but end up at trial, with parties who have stark, polarised opposite world views.

One such case was that of Wallis and Manning. On an asset pool of just under $2 million, when the husband came in with most of the farming property and licences from family gifts, the trial judge after a 27 year marriage assessed the contributions of the parties as 70/30, and with the adjustment for future factors, this meant a division in favour of the husband of 60/40, or a difference between them of about $750,000. A big difference given the size of the pool after such a long marriage.

Not surprisingly, the wife appealed- and she was successful. Not surprisingly, the end result after a 27 year marriage was an equal outcome. The Full Court of the Family Court assessed contributions as 57.5%/42.5% in favour of the husband, with a 7.5% adjustment tot he wife in light of future factors.

Like cases should be decided alike

The first thing that the case stands for is that, even though there is a wide discretion under the Family Law Act as to what is a just and equitable order as to property settlement, judges (and therefore mediators, family lawyers and parties) should be guided by like cases.

The Full Court stated:

A
central question which emerges from the appellant’s grounds and arguments
is whether that tension or question can and should
be answered by reference to
the assertion of a “range” of outcomes that mark the boundaries of a
proper exercise of discretion
in a particular case.

The
exercise of wide discretions informed by statutory considerations or well
settled common law principles is not, of course, unique
to s 79 of the Act.
Awards of general damages for non-pecuniary loss in tort, and sentencing in
criminal cases are familiar examples where
daily tasks of judges include
precisely that. Where the exercise of jurisdiction and power involve wide
discretions by reference
to statutory considerations or well-settled common law
principles terms of convenience emerge, as do common practices, designed to
facilitate expedition in the running of cases and “shorthand”
submissions made within them. The assertion of a “range
of outcomes”
by the parties to a case is common in all such areas. In cases seeking orders
for settlement of property pursuant
to the Act, the practice is almost
ubiquitous.

and:

Reference to comparable cases
serves a principle central to
the exercise of a wide discretion, namely, that like cases should be treated
alike. That end seeks
to avoid “arbitrary and capricious
decision-making” which is the antithesis of “consistency in judicial
adjudication”.

and:
Realistically there
should be a consistency of
results ...where genuine comparability
exists, to provide “assistance
and guidance in determining what is just and
appropriate”

and:

While
recognising the fact that no two cases are precisely the same, we are of the
view that comparable cases can, and perhaps should
far more often, be used so as
to inform, relevantly, the assessment of contributions within s 79.

The
word “comparable” is used advisedly. The search is not for
“some sort of tariff let alone an appropriate upper
and lower end of the
range of orders which may be
made”. Nor is it a search
for the “right” or “correct” result: the very wide
discretion inherent in s 79 is antithetical to both. The search is for
comparability – for “what has been done in other (more or less)
comparable
cases”–
with consistency as its aim.

It
is nevertheless also important to recognise, as Gibbs CJ did in Mallet
that earlier decisions:

... do no more than provide a guide;
they cannot put fetters on the discretionary power which the Parliament has left
largely unfettered.
It is necessary for the court, in each case, after having
had regard to the matters which the Act requires it to consider, to do
what is
just and equitable in all the circumstances of the particular
case.

How did the Full Court assess contributions?

The Full Court decided that the contributions of the husband were greater than that of the wife.

The Full Court held:

The
parties were married for 27 years. Their marriage occupied virtually the
entirety of their adult lives. Judicial debate has surrounded
the so-called
“erosion principle” but that debate has centred primarily on the
question of whether early capital contributions
are eroded only by “an
imbalance” in later contributions. In our view, talk of
“erosion” of the early capital
contribution obscures the issue
rather than illuminates it. However, it can be taken as well settled that the
length of the relationship
has a significant impact on how early significant
capital contributions should be viewed in assessing the totality of the
parties’
contributions. For example, the Full Court has
said:

The longer the duration of the marriage, depending on the quality and extent of
her contribution, the more the proportionality of
the original contribution is
reduced.[73]
and
The longer the marriage the more likely it is that there will be later factors
of significance, and in the ultimate the exercise
is to weigh the original
contribution with all other, later, factors and those later factors, whether
equal or not, may in the circumstances
of the individual case reduce the
significance of the original
contribution.[74]

The
length of a marriage is important, then, in assessing the respective
contributions of the parties, particularly when it is said
that significant
capital contributions made early in the marriage are a dominant feature of that
assessment. It is, accordingly,
an important consideration in seeking decisions
that might assist in the assessment of contributions by reason of being
“more
or less similar” to the present.

The
land and water licences gifted by the husband’s father remain, many years
later, as the predominant component of “the
property of the parties or
either of them” to which orders made under s 79 will apply.

One
half of the current value of Property N is $125,000. The half share in Property
G has a value of $281,420. The Property G water
licences have a total current
value of about $700,000. The combined current value of the land and water
licences gifted by the father
represents about 35 per cent of the gross current
value of the property and superannuation interests available for distribution
and
about 56 per cent of the net current value of that property. The
wife’s capital contribution of her inheritance represents
roughly 1 per
cent and 1.75 per cent of the gross and nett respectively.

The
gifts made by the husband’s father were made early in a long marriage. The
use to which those gifts were put rendered them
of fundamental importance to the
parties throughout the marriage. They provided the foundation for a farming
business, operated as
a partnership between the husband and the wife, from which
the marriage derived income during its duration. They provided land upon
which
the parties’ home was situated and, thus, a place to live.

The
husband conceded in cross-examination that the current state of the properties
and their current value was due to the very significant
efforts of both parties
in roles that both differed and overlapped throughout the marriage. Her Honour
found in that respect that
the wife “performed more of the parenting and
the husband performed more of the work outside the home”. We adopt that
uncontroversial finding.

There
can be little doubt on the evidence that each party contributed to the maximum
of their respective capacities and abilities
within these various roles. There
was a genuine mutuality to their relationship and it, and the financial
decisions and arrangements
within it, were subject to the “unstated
assumptions” that devolve from that mutuality. Contributions on this
farming
property involved hard work outside of what might be described as
“normal working hours”, often seven days a week and
often without
holidays. Life and the derivation of income were subject to factors outside of
the efforts of the parties (for example
natural disasters, natural climatic
conditions and the like). The parties’ roles were performed in an area
relatively remote
from urban facilities and interests.

We
see no reason to attribute to the role of either party any predominance or any
greater “value”....

No two marriages are identical and reference to comparable cases
is not designed to find either a “perfect
match” or a “right
answer”. Rather, what is sought is a comparison with more or less similar
cases with a view
to achieving a measure of consistency of assessments. That
search might commence with comparable decisions of the Full Court where
the
discretion has been re-exercised. Both principle and pragmatics result in that
pool of cases being small. That is because any
re-exercise by the Full Court
must be undertaken by reference to the facts and circumstances existing at the
hearing of the appeal,and very
frequently, many contested issues emerge between the judgment and the hearing of
the appeal which effectively precludes
a bench of three from re-exercising.

No comments:

"To Stephen,
Thank you for all your support on this special day. Bringing about awareness about Domestic Violence is so very important. Thank you for your choice to stand up against it.
Blessings,
Narelle".
Narelle Warcon, author of Blonde Roots

I am one of Australia's leading surrogacy and divorce lawyers. I was admitted in 1987, and have been an accredited family law specialist since 1996.
I am a partner of Harrington Family Lawyers, Brisbane.
I am an international representative on the American Bar Association's Artificial Reproductive Technology Committee. I am the first international Fellow of the American Academy of Assisted Reproductive Treatment Attorneys. I am one of 33 Australian practising lawyers who are Fellows of the International Academy of Family Lawyers, one of the most prestigious family law groups in the world. I am a founding member of the Australian Chapter of the Association of Family and Conciliation Courts.
I have written and spoken extensively about family law, domestic violence and surrogacy.
I have handled pretty well every type of family law case there is known in over 30 years, and have advised surrogacy/fertility clients from throughout Australia and at last count 24 countries overseas. I have obtained surrogacy orders in Qld, NSW, Vic and SA- the only lawyer to have done so.